Fed Said to Study How Banks Manage Deposits After JPMorgan Loss
By Caroline Salas Gage and Craig Torres
JPMorgan Chase & Co. ’s $2 billion trading loss has prompted the Federal Reserve Bank of New York to examine how banks in its district are managing a wave of deposits that has flooded the financial system since the credit crisis, according to a person familiar with the matter.
New York-based JPMorgan’s trading loss, announced last week, occurred in its chief investment office, which oversees about $360 billion, the difference between deposits and what the bank lends. The New York Fed is investigating how other banks it regulates are investing deposits that aren’t loaned out, said the person, who wasn’t authorized to discuss the matter publicly and declined to be identified.
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